Entertainment Phone-Tablet App Market Ripe For Showbiz: Confab

The market potential for entertainment-oriented smartphone and tablet apps is wide open, a top market analyst said today at the Entertainment Apps Conference in a Universal City hotel. “I think it’s just starting with entertainment,” said Jarah Euston, director of analytics with Flurry, which closely tracks the app-creation industry. Already, Flurry’s share of the so-called “iGen Audience” of daily app users is larger than the one for top primetime TV shows.

Sales in Apple’s App Store passed $6.5 billion in about two years, nearly 20 times the rate in the first two years of Apple’s then-music-only iTunes store. Now, both Apple’s operation and Google’s Android app marketplace have more than 700,000 apps, panelists said. Microsoft says its recently launched mobile-app marketplace for the Windows 8 operating system has more than 100,000 apps.

“It’s very exciting. It’s a little bit of a Wild, Wild West,” said Ed Leonard, former CTO of DreamWorks Animation and now CEO of Ptch, a DWA spinoff whose apps use modified versions of its high-end animation tools to allow creative people to do all kinds of tweaks to their own video and photos. “I think we’ll find some new talent.”
And the market isn’t confined to the United States, said Euston. Flurry projects that China will surpass the U.S. in market size as soon as first quarter next year, although she cautions, “There’s still a ton of money in the U.S.” market.

The massive app-based game sector, technically one kind of entertainment, has seen growth flatten a bit because of its reliance on blockbuster game titles such as “Angry Birds” that have to be refreshed or completely replaced fairly regularly to drive user interest. Social-networking apps also remain a major attraction.

But other kinds of entertainment-oriented apps are taking off.

The definition of “Entertainment” apps can vary widely, from straightforward apps that carry professional, scripted video from a name-brand source to apps that allow a fan to vote on who wins “X Factor” to apps that connect fans with each other so they can talk about the latest episode of a hot show, either during its broadcast or or afterward.

Panelists throughout the day said big opportunities exist especially in creating more compelling offerings in the Android marketplace, and for apps that can interact with and control TV experiences. Advertising networks, similar to those widely found across the Internet, are increasingly substantive in the mobile space too.

Finally, Microsoft and Facebook are vying to become the third major player in the app world.

There are some caveats checking all the enthusiasm, however.

A vice president with one big reality-TV production company said that networks these days still let producers keep their digital rights when a show is bought, much like they once did with product placement or international rights for show formats. But, he warned, just as with those other kinds of rights, within a couple of years, those digital rights will have enough value that networks won’t be simply leaving them to the producers to exploit.

Equally complicated will be the conversations between companies when apps for, say, connecting fans of a music competition start making money off advertising to them, panelists said. “We can all cooperate and get along now because there’s no money,” said Hardie Tankersley, VP platforms & innovation for Fox Broadcasting. “But the day someone calls up says someone (at an app) is selling ads against ‘American Idol,’ there’s going to be some very serious discussions.”

The conference was sponsored by the Application Developers Alliance, a trade group for the apps industry, and Variety.